12:28 PM EDT, 08/15/2025 (MT Newswires) -- Nice (NICE) is expected to benefit from AI adoption in the Contact Center as a Service market, supporting future cloud revenue growth and profitability, Morgan Stanley said in a note Friday.

A "favorable" setup is expected ahead of Nice's October Capital Markets Day in New York, where the company's management will share updated medium-term financial targets and provide more details on its Cognigy acquisition, which is scheduled to close in Q4, the investment firm said.

Large AI deals and new partnerships with Salesforce ( CRM ) , ServiceNow ( NOW ) , and Snowflake (SNOW) are expected to contribute to growth through fiscal 2026, the analysts said.

Nice reported Q2 cloud growth of 12.3% year-over-year, showing stabilization and meeting expectations, despite concerns around the underperforming LiveVox asset, according to the note.

Q2 AI and self-service annual recurring revenue (ARR) rose 42% year over year to $238 million, up from 39% in Q1, with several large AI wins contributing, Morgan Stanley said.

Management reaffirmed full-year 2025 cloud growth of 12%, showing confidence despite Q4 seasonality, according to the note.

Morgan Stanley maintained an overweight rating on the stock and lowered its price target to $193 from $202.

Price: 131.77, Change: +3.92, Percent Change: +3.07